Legal Question in Business Law in California

I am the owner of a store in the local mall. A year ago, the mall solicited local entrepreneurs to start a consignment store featuring local arts & crafts in the mall. After a tenuous first year Including a major earthquake that flooded the store ruining a large amount of handmade items & shut us down for over a month), we are finally starting do do well. Now the mall is telling us that they will not be renewing our lease. I have tried to contact the mall office to find out the reason, but they won't return my calls. I have also sent an email to the regional manager of the corporation that owns the mall, also with no response. One of the vendors in the store did talk to the mall office, and was told that the mall had only planned on the store being short term. At no time was this ever mentioned to me, nor was it in the contract I signed. I was told during negotiations that there would be the option to have another lease. Between myself, and the 60+ vendors that are in the store, we have put a lot of time, money & effort into this project. If we had known that it was short term, I am sure that we would have chosen to go in a different direction. Although no one has come out and said it, I feel that I am being discriminated against due to the fact that I require a service dog to be with me, and the mall does not like him being here (of course they will never admit that) Do I have any recourse?


Asked on 5/15/10, 12:17 pm

2 Answers from Attorneys

Not unless you have a renewal option in writing, or proof of discrimination (and with 60+ vendors, it's pretty unlikely you can prove discrimination against all 60), you have no recourse.

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Answered on 5/20/10, 12:40 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I handled a similar case for the owners of a consignment-type business which lost its lease, then the landlord contacted the former vendors and signed them up to get their space directly from him. Since my clients had no real right to force the landlord to renew, our case was based on a theory of conversion of the goodwill of the business. Unfortunately, there is old but still observed judicial precedent in California that goodwill cannot be converted, despite statutory definitions of "goodwill" and "conversion" that, if read together, would lead to an opposite conclusion. Some recent appellate decisions contain dicta suggesting that the "no conversion of business goodwill" doctrine is ripe to be overturned. If the mall owners or management usurp your business concept, it might be time for another conversion case.

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Answered on 5/20/10, 1:04 pm


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